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tv   Street Signs  CNBC  March 21, 2013 2:00pm-3:00pm EDT

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welcome back to welcome back to "power lunch." if you're just joining us, we have a selloff on wall street. we're down 94 points on the trading session. we were off about 101, 102 points a short while ago. s&p is off almost 11 now. so that's almost three-quarters of a percent. and the nasdaq is off almost a full percent. oracle is one of the reasons of the drag on the nasdaq. and the transportation average is one of the reasons that we're seeing the drag here with the transports now down 110 points. art cashin joins me to talk about this. how much is the transport points and data points are we getting here at home and how much of it is still cyprus? >> i think it's a combination of three things. number one, what we got yesterday in regard to the transports, fedex and then also you got caterpillar indicating maybe the global economy, and that means fewer goods shipped even by rail and otherwise. we got kind of lousy data out of
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europe this morning. and now i think we're running into a problem in cyprus because it's becoming more and more evident they probably can't reopen the banks on tuesday. and the worst part of this is it's out of the hands of the negotiators and into the hands of the people. >> and that is in a nutshell what's affecting the markets. that will do it for us on "power lunch." ty, see you in just a little bit. >> terrific. hurry back home. "street signs" begins right now. we'll see you back here tomorrow. perhaps the market won't climb its cyprus hill. stocks down as bank fears and atm lines grow and the island nation that's captured the world's attention. but our guests have stocks and etfs that you need to buy now, cyprus or no. when the going gets tough, the scared usually buy gold. but we're going to find out why gold is not at 2,000 bucks an ounce right now. plus, why nearly every solar company and investor is getting
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it wrong about china. and a longtime bear finally gives in and starts touting one big internet name, mandy. >> mellohello, everybody. the dow in danger of having its first down week in five. the averages are on track for their worst day in nearly a month. with the day's drop, all the major averages are lower for the week. straight down to bob pisani. can we put our finger on any one thing? is it a mix of the fed? cyprus? earnings guidance? >> i'm a little more concerned about earnings. oracle and fedex are weighing on the markets overall. let me just show you the weak sectors today. some of them are high beta names. oracle is messing around with the tech names. ibm is a weight on the dow. housing because we didn't get quite over 5 million homes, existing home sales numbers. that was a psychologically important number. they sold off on that. it's the transports i'm a little more worried about. let me show you what's going on today here. there's the bottom here in the transports here which we're
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hitting for today. and it's largely due to some of the big names in that. fedex, for example, is now down about 12% for the week. console is weak. gatx, landstar, intramodal, rail and gatx, shipping as well, boating as well. they're all weak today. they weren't weak yesterday, but second day in a row and fedex now seeing real distribution. finally i just want to note something that's important. the house passed the continuing resolution. we made such a big deal about two weeks ago, not a sound was heard anywhere. this is likely now no march 27th government shutdown coming. my friend over at potomac research made a great point this morning. he said washington used to be a horrible issue for the markets. it's now becoming potentially a positive. there's even talk of a mini grand bargain happening in the next few weeks as well. a real change in tone. nothing happened down here when they passed that continuing resolution today in the house. mandy, back to you. >> apparently wall street does
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not care about washington anymore would be the way i would put it. thank you very much, bob. >> smart move by america. ignore d.c. overseas, anger is cyprus is growing as fast as the atm lines at the banks. nervous and frustrated citizens lining up to pull out their money. no one seems to know what the fate of cyprus and its banking system will be. all this as the ecb ramps up pressure. michelle caruso-cabrera is in the capital of nicosia. >> reporter: we're getting clarity about how they're going to resolve this crisis. there are protesters down the street. they wouldn't let them get close to parliament. they're mostly the workers at the weakest bank in this country. and it looks like increasingly the way they're going to come up with money to solve this problem is to shut down that very weak bad bank, move the good assets over to another bank. the workers that have gathered know they're going to lose their jobs if that's indeed what happens. more than 2,000 people.
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this has been a long process to arrive at this point. and as you mentioned, there had been all day long lines at the atms of the bank because word had gotten out that something was up. and we saw 20 people deep at any given time. you can see the protesters there. and then the lines at the atms as well. now we are told that there's going to be a 250-euro limit if and when the banks reopen. they're going to put in capital controls. as long as there's a plan in place at some point, the european central bank will let them reopen on tuesday. we've got to see this all finalized. back to you. >> absolutely. just real quick, what are the chances do you think these banks or some of the banks would default and we could see cyprus leave the eurozone altogether? >> reporter: so it looks like from what i'm hearing from sources within the meetings, they're telling me that it looks like there's going to be one
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bank that shut down, one of the weaker banks will remain standing. it will get more capital. that looks like the plan. it was two banks that are considered insolvent. then because there will be capital controls in place, it will be very hard to bring down the banking system. they're doing this on purpose. normally they are prohibited from doing this in the european union. but in this case, because it's an emergency, they've decided to do it, mandy. >> michelle, is the prospect for a russian full bailout pretty much off the table at this point? >> reporter: i'm not sure it was ever really on the table. they were talking about giving them natural gas rights from future natural gas. there's natural gas here. but when that was finally going to come online, it was very dubious how you could ever structure them because you're not quite sure when that exploration's going to be done. if somebody wanted to buy the bad bank, they could have done it all along. it's been for sale for six months now. so i'm not quite sure what they thought they were going to get
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out of russia at this point. >> have you spoken to any cypriots on the street? how do they feel about this, michelle? >> reporter: they are so angry. they think that they have been treated very poorly by the euro group. they are insulted, some of them, at the prospect of taxing any deposits whatsoever. they don't want even the wealthy depositors to be taxed because they see it as an attack on their system here, their business model for the country, which contributes 50% of the gdp. they know there are going to be job losses widespread because they're shrinking the banking sector on purpose. that's really going to hurt here. >> michelle, thank you very much. we'll see you again. great reporting. the trillion-dollar question, folks, is this. is cyprus a potential black swan with huge unforeseen consequences, or just a little island sideshow with no impact on your money? let's ask cio at bmo private bank and steve oth at federated investors.
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jack, how important is cyprus? >> it is important, brian. this is really the first test of eurozone financial system will. it's finally come down to an insolvency. and the fact that they were willing to impose taxes on deposits really sent shock waves not through -- not just through cyprus and through the eurozone but really through the world. this is really unprecedented. where you put the bondholders ahead of depositors. and so, you know, in a world where -- or in a continent where deposit rates aren't very high to begin with, you look for any excuse for taking money out of the banking system and just hiding it under your mattress. you know, this could be one of them. >> let me put it a different way, then, jack. your clients, wealthy individuals, are they calling you and saying hey, jack, i'm really scared about cyprus and europe again. let's take our money out of the market? >> no, they're not, brian.
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in fact, we haven't had money really invested in europe in a while. so we were actually looking to try to get back in. we were going to wait for the outcome of the italian election to figure out when to dip our toe back in there and perhaps hedge that currency risk. but, you know, now with these new developments in cyprus, it's probably set that strategy back a little bit. >> steve, yesterday on the show we had scott miner from guggenheim. he said it's got the potential to be a lehmanesque situation. and yet i believe you just called cyprus a sideshow. why are you willing to relegate it to that particular category? >> yeah. you know, mandy, all the bears, they keep thinking that we're going to have a recurrence of this category 10 earthquake that we had in 2008, 2009. and every one of these has proven to be a dimmer echo of the previous one. we've been through this several times now. and, i mean, the last one was just earlier this year when we had the debt ceiling crisis two
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and the italian election. we were down 3.5%. we were down two years ago when we had spain one and the first debt ceiling, we were down 10%. this week we're barely down at all, maybe a percent. every time we get through one of these and we will get through this, more and more investors become convinced that the category 10 earthquake has already happened. and long-dated assets like equities should be worth what we think they are worth based on long-term fair value assessments. we think the s&p should be trading 17, 18 times. >> let me get more personal, then, steve. are you a buyer, as we see any kind of cyprus-inspired dips like today, like recently, would you be a buyer? >> absolutely. we're recommending people be overweight eck witdquityequitie. that's what we would be doing here, mandy. i think jack's going to be waiting a long time. europe's going to have a series of these aftershocks, but it's
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part of the healing process. i think they will get through this cyprus thing. i think most european aren't even sure if cyprus is part of the eu. it's got this russian interest which makes it very unique. it's very different than italy and spain. i don't think it's really something people should be worried about. >> cyprus getting us all down. get us a little hope. what kind of etfs are you guying? >> one of the things we really like is the free cash flow yield on the s&p 500. certainly for the first time really ever. higher than the yield on high yield bonds. the highest yielding free cash flow yield sectors are financials and health care. financial would be xlf. health care xlp. these are both etfs on the sector strategy. >> what about you, steve? what are your stock picks? >> yeah, we're definitely in banks and financials, we like wells fargo. we like cyclical areas, the economy, reliant steel, i mentioned, which we think is
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part of the u.s. manufacturing renaissance. we like china here, too, which has been through a big bear market, just starting to come back out of it. our numbers indicate china is going to be recovering the second half of the year and going on a bigger growth. air china is a great stock, we think. two or three times cash flow. 40% off its highs from just a couple years ago. >> and jack, to wrap it up, you guys both just recommended financials, we're watching what's going on in cyprus. do the weakness in european banks benefit our banks at all? >> i would say in general, it does. you know, it certainly puts the u.s. in a better light. it puts the u.s. banking system in a better light. you know, while we're certainly not out of equities, in fact, we're overweight high volatility asset classes, you know, i would prefer to at least at this stage, you know, make our money here at home. >> got it. relatively speaking. looking better. thank you very much, jack and steve. and by the way, we're sitting
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around session thrlows. over to josh for a quick "market flash." >> check out dell inching into the red today. our andrew ross sorkin reporting that sentiment in new orleans that it is unlikely blackstone will make a bid for dell. separately, dow jones is reporting that blackstone and general electric's lending arm has discussed jointly pursuing dell's financial services business which offers loans to corporate customers and consumers. blackstone has until midnight on friday to make a final decision on dell. back to you guys. >> josh, thank you very much. quickly before we tease what's coming up next, we want to ask you this. and i put out on twitter, mandy did as well. what do you think? is cyprus, "a," a huge lehman-like black swan event? two, relevant but not dooming, or three, insignificant noise? >> we've already got great answers in. and please do keep on tweeting us. on deck, it's like those richard scarry books.
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with all that's going on, why isn't gold surging more? plus, we're going to debate one company's plan to punish employees if they do not disclose their weight and body fat. that's coming up. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros
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clearly you clearly notice we're sitting on a down day. we are looff the lows of the da. you have over the past 24 hours earnings and guidance which have disappointed. oracle is one of those big names
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that disappointed us. also you have cyprus in the background causing risk aversion. and you've also got fact that yesterday that chairman bernanke was having a few of those tapering-off comments, all in all creating a negative day. as we know, we can't keep going to record high after record high. >> no, i'd be more worried if we went up every single day. that's terrifying. a little pullback, the pause that refreshes. >> die jegestion after a big me. with all the fears around cyprus, why isn't gold surging more than it is? sharon epperson, we'll get to that. speaking of russian money interest, there is a major deal in the energy world today. >> reporter: that's right, brian. we told viewers about this earlier this month. and now the deal has closed. russia state oil giant rosneft has closed a deal worth about $55 billion. it is now taking over tnk-bp to become the world's largest oil
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output listed oil producer and also now bp will have a major stake in the company. the deal was announced at the home of russian president vladimir putin. and it comes at a time that is very important in terms of the talks that cyprus has had with moscow over helping it come over its financial troubles. keep in mind that at issue here, of course, is cyprus natural dass gas reserves offshore of interest to many countries including russia. we're looking at the ceo talking about the fact that he believes the company and the deal between bm and rosneft is actually more important than the situation in cyprus. and more than that, that they believe they've taken advanced measures and prepared for this in advance and not been affected by the situation in cyprus. that's certainly not the story for gold. gold has been impacted by cyprus. jitters causing a safe haven bid for gold. it's been above 1600 an ounce but has not surged higher,
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traders tell me, because there is concern out there that some institutions may sell gold in order to raise cash if the contagion spreads. that's a reason why we've seen a bit of a cap on the upturn we've seen in the gold price. back to you guys. >> thank you so much for giving us the background. meantime, why aren't we seeing a surge in the price of gold? joining us now, boston adviser's president. mike, what do you think? >> hi, mandy. you know, i'd ask you one simple question. what do you think the demand for gold in cyprus is? probably pretty high. it's a little bit too micro a market for us to really dig into that. gold's clearly changed. we definitely have an inflection point here. a week or two ago, that's been exacerbated or helped along by the cypriot news. i think this entire thing has given people and investors around the globe an understanding of the fridagilit
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of assets particularly in the digital age. >> that's a good point, but why isn't it moving more? it's hardly going through the roof on political problems. >> it's not. but look at the general trend before. it was quite sharply negative. and we seem to have arrested that fall. there's clearly a lot of supply coming from the etf holders. we've seen etf holdings of gold ounces down about 10% this year. there's clearly sort of continued supply coming in. and i think that's just sort of stop that. you're hitting, you know, an equilibrium a little bit with this news. it's certainly not going up. you know, i'm surprised. i thought it would be up more. >> and if you look at a five-year chart, are you looking at a two-year chart. the trend line. we have made a series of lower highs. every time we make a new peak, it is lower. and if you draw a trend line through it, it's almost a perfect tentacle run down. it just looks from the charts that gold is tired. >> yeah, no doubt.
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nea there's no doubt about it. there's been a lot of demand for gold over the years. and a lot of people have filled up with gold who traditionally have not been buyers of gold. we're seeing that gold trade be tired. i think that's the right word for it. the question is will new supply -- or new demand come in? we continue to see massive demand from china. there are, you know, it is going to be a safe haven in a scary world. i think part of the reason gold hasn't gone up more, this isn't particularly huge news on the sociopolitical scale. cyprus by itself is a relatively insignificant trivial matter. it's only what it reminds us of as investors around the globe, that i think causes the concern. >> indeed. mike, thank you very much for joining us. that really tells it all, doesn't it? >> yeah, i'm telling everybody, make a trend line down, a series of low or highs every time it looks technically tired. next up, just wait until you see what mcdonald's is now serving up in china. and later on, in honor of
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down by down by 128. the dow is now on track for its first down week in five. let's take a look at the components here. verizon and home depot have just turned positive. that's a good thing. we are seeing weakness in techs. cisco, ibm and hpq. and part of this is because tech is really dragging its heels today on the back of oracle's surprise to the down side after the bell yesterday. brian, back over to you. mandy, thank you. check this baby out. it just hit the menu at mcdonald's in china. folks, that is not photo shop. that is two beef patties, two fat sausages slathered in mustard. it all comes on a pretzel bun. i think we can all just say, you're welcome, china, as we continue our number one export here in america, obesity. >> yeah, definitely exported it to australia, thank you very much. >> you're welcome as well.
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i can't wait to go to war with the aussies. we'd be too slow to fight back. beef is getting expensive, and it's thanks to washington. i know a lot of hot air comes out of there, but i didn't realize cow prices were affected by it. >> reporter: yeah. you know, beef prices keep going up. here's what's interesting. beef futures keep going down generally if you look at live cattle futures. that has really surprised some ranchers. and the cows, too. yes, demand for beef may be down because it costs so much. but supply is ray doway down. reuters says it's cut to its smallest level in 61 years. one rancher reduced his herd by 25% so less supply should drive futures higher, right? here's why it isn't. ranchers are telling me for one thing, there may be fewer cattle, but they weigh more. so there is still a lot of beef out there. also feedlots are slowing down
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the process. they're not buying as much because it costs too much to feed them with the corn the way it is right now. and so they are losing money. and packers are expected to process less beef. once the usda starts furloughing meat inspectors because of the sequester, you can't make meat without an inspector. all that said, that's why this whole thing is slowing down, driving down futures. even so, the president-elect of the national cattlemen's beef association says eventually fewer inspections, less beef is going to drive what's for dinner higher. listen. >> we're worried that possibly that the price of beef may go up. substantially because of that. we don't think it was a necessary cut. we feel like there was a lot different areas it could have been cut rather than meat inspectors. >> reporter: well, it may not matter. even if beef prices come down by then, consumers, americans and restaurants may have moved off to chicken and pork. with fewer meat inspections
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meaning less meat, quote, maybe we should all try vegan fridays. i don't think that burger will work. >> yeah. i'm not up for that. sorry. i'm up for most things but not vegan fridays. thank you so much. i loves me some meat. thank you so much, jane wells. very quickly, the markets are continuing to claw back some of their losses. we're still down, though, by 72 points on the dow. not as bad as the 128 from before. next, workers told to fork over their weight and bmi or pay a steep fine. is this outrageous, or is that just right on the money? later on, tweets on the street. if twitter went public, would you buy the stock? perhaps the bullish case for a twitter ipo coming up. the the cnbc real-time exchange market snapshot is sponsored by interactive brokers.
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okay. okay. the dow is now recovering about 50 points. it's now only down by 77. let's just get to peter kenny
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right now. what do you think is bringing this comeback in the markets, peter? >> i think, mandy, it has an awful lot to do with being very, very sharply and steeply oversold on an intraday basis. we came into the day with some very soft footing despite the fact that we had some very positive economic data in the form of the employment numbers, housing, existing home sales, home prices. the fact that they went up 6.5% over the last period. there's a lot of positive economic data. but what's really overshadowing that data is, of course, what's going on in cyprus. in a much broader narrative, the eu, what the implications are for the eu. so questions there. and, of course, at the end of the day, we were probably, more than anything else, overbought as an equity market, broadly speaking. >> that's an excellent point about being overbought. there were a lot of overbought signals in the last couple of weeks. as brian was saying, maybe this is a good thing. a pause is healthy. >> i'll tell you what, mandy.
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it is welcomed. you don't often hear that from somebody who works in the markets, but a pullback is healthy and it's welcomed because it gives this market move much more sustainability in terms of a move higher longer term. we needed a pullback. i suspect we get more of a pullback. maybe not today. maybe we've seen the lows for the day. but this shift that we've seen over the last four days has also been accompanied by a rise in the volatility index which tells us that there's some risk off men at that time at work in the market. which should give us an opportunity to settle back in another three, three or four percentage points off the high, force recalibration and reallocation. >> you're right. we did see a rise in volatility, but it's still at 13 which is still historically low. thank you very much to peter kenny. obesity is a big problem, but it is not just a health issue. it is an economics issue. health care costs related to obesity are in the hundreds of billions. folks, you probably didn't get a
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raise because your company has to put more money into health insurance premiums. well, cvs caremark is trying to do something about it, and it's causing a stir. the company's new health care plan will penalize employees if they don't weigh in. that's right. reveal their weight to the company by may 1st. good idea or terrible invasion of privacy? let's bring in mimi roth and jeff steyer, senior fellow at the national center for public policy. mimi, i just have a sneaking suspicion i know where you fall on this issue. >> yes, i weigh 122 pounds. >> you've revealed it. jeff, don't worry about it. i just told comcast, should i have to tell comcast what my weight is? >> why shouldn't you? >> it's none of their business. >> let me tell you about. obesity has made it everyone's business. it's not just costing raises but costing jobs. corporate america should not be carrying the weight of employee obesity. >> pun intended? >> it's related to lifestyle
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choice. and just like they say we maybe don't want smokers, you saw the cleveland clinic saying maybe we don't want to hire obese people. that's where we are. >> and we all have to disclose here at nbc if we smoke or not, so why not disclose your weight, jeff? >> we're at about the halfway point. i think meme wanted this. we talked about obamacare, increasing costs. first of all, this is a private company, publicly traded but a private company. they should be allowed to do what they want. many employees may choose not to work there now. this is an unintended consequence of obamacare that health care costs are going up. and companies are trying to do more. i don't think this is a very good way to do it, but -- >> but jeff, even without obamacare, employee obese it'd costs us a fortune. >> that's fair enough. >> with or without obamacare. >> that's a fair point, but none of this happened -- if i could just -- >> only 8% eat right, exercise daily, don't drink to excess and don't smoke. only 8% are even trying.
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>> they're very boring people. >> brian, that being said, all of these new intrusive approaches, private sector or public, have only started after obamacare. >> why do you call it intrusive, though? if somebody's unhealthy, right, grotesquely obese and it's costing me as a company owner three times as much, my other employees have to suffer for that person. >> but that's happening on a nationwide basis. i think meme will agree, across the board because we're all paying for it. that's a better argument against obamacare than for intrusiveness. should -- let me just finish. should they charge more if you're out in the sun too long? >> possibly. >> they're charging not only for smokers but people using nicotine. >> it's about the insurance actuaries. that's what they decide. >> that's because obamacare won't allow underwriting and charge for different risks. >> i think we should have good motivations to stay healthy, whether it's not smoking, keeping a healthy weight and also staying out of the sun should be another one. i think it's good that corporations are potentially
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taking this on as their own responsibility. >> how far does it go, though? right? working for a company revealing your weight is one thing. does this now translate, to your point about the mayo clinic i think it was -- >> cleveland clinic. >> cleveland clinic. sorry, you come in for an interview, clearly you're overweight. we're not hiring you. is that discriminatory? >> well, it doesn't end there. >> don't they have the right to choose who makele up their employee population? wait. let me finish the rest of that. when it comes to -- >> gender, class, age. >> weight, smoking, lifestyle choices. now they can. >> that's where the line is. i agree you can't be discriminatory, but you can be selective. >> now you guys are on the same side? against me? what the hell happened here? >> that's the result of obamacare. meme has been calling for this. she wants more. >> she wants discriminatory! >> she wants more government intrusiveness. >> what are we even talking about? employers. they should have the right to decide they're not going to take
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that on. and employees, it's part of the interview process. and if we expect someone to pick up the tab -- >> weigh yourself on google so they can sell the data to the maker of oreos. >> if i can make a final point. the government has caused all of this. >> no, people have caused this by not controlling their impulses. >> let him finish. >> this is an unintended consequence of obamacare because health care costs have gone up. none of this happened a year ago, two years ago. it's all happening now. university of pennsylvania won't even hire tobacco users. >> it's been skyrocketing for a long time. >> all of these changes have come as a result. >> no, the cleveland clinic was before that. employers have been looking on how to offset the costs of obesity for a while now. >> i'm just throwing out there, the mayo clinic. thank you. miracle whip clinic. you guys finally got it. mcfly. >> we'll leave it there. great debate. i don't know whether they're agreeing or disagreeing. sort of going in and out. if twitter went public, would you buy the stock? the convincing bull case coming
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up next. and the don draper effect for one tech start-up. it's not what you think. first, what's coming up on "the closing bell"? >> after all that, i'm hungry. i don't know about you. i just want to eat. coming up on "the closing bell," delta airlines' ceo richard anderson is here exclusively to respond to reports that the airline may be buying $6 billion worth of new planes. also, you say you're concerned about a stock market correction? we have three stocks that could help you survive a selloff. and famed fed critic james grant weighs in on the central bank and when it may stop its economic stimulus and how that would affect the economy. maria and i will see you at the top of the hour for the most important hour of the trading day. but in the meantime, "street signs" is back after this short break. all stations come over to mission a for a final go.
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thousands of qualified technicians, and a personal passion to help protect your business. when your business is optimized like that, there's no stopping you. we are tyco integrated security. and we are sharper. >> happy happy birthday, twitter. ceo jack dorsey sent his very first tweet seven years ago today. twitter now has 200 million active users, us included, with over 400 million tweets every single day. don't forget, you can now find us @streetsignscnbc. at this point twitter has no plans to go public. but if it did, would you buy the
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stock? julia boorstin is here with the bull case. >> here's the thing. it all depends on valuation. we also don't know exactly what twitter's numbers are. so i'd be very curious to see twitter file that s1 and finally get to dig through all those numbers. this is a company that's projected to have $800 million in refuvenue next year. many people say based on changes they've made recently, they could have over $1 billion in revenue. mandy, they have a couple of big advantages that really give a lot of potential in that ad space. >> i'm really interested in what the bear case is. and let me think. facebook seemed like a great idea to ipo at the time. and what's it done since then? i mean, isn't there a possibility that the same thing could happen to twitter? >> i think that's one reason why twitter is really taking its time. i've interviewed the ceo. he said we have no plans to go public. we're just focusing on the business. they've made changes. one is they've rolled out much better targeting, allowing advertisers to target you based
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on very niche interests. if they know that i really like a certain tv show, they could send me those messages that are just for me and maybe other advertisers that also market on that tv show. very narrow targeting. and just a couple of weeks ago twitter announced that they are going to launch a new api. that basically means they're going to make it much easier for advertisers to buy ads on the twitter platform and just sort of insert in twitter ads just like they might buy facebook ads and linkedin ads. so by making ads that much more targeted and easier to buy, i think they're going to see a big uptick in ad revenue this year. and the potential, then, is much bigger, especially if they start measuring the impact of those ads. >> julia boorstin, thank you very much. well, it is jon hamm's world. we're all just living in it. one company tried to help us live a little larger. an online list. it's even offering clothes with its jack threads acquisition. ben lair is here with us as
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well. i was perusing your site, you know, very cool. >> thank you. >> a little private jet trips and trips to costa rica. now you're getting into actually selling stuff. >> yes. >> why? >> well, we had a relationship with our guys through the content where we would recommend them go to a restaurant and they would go. or buy clothing and they would buy it. and we realized that we weren't taking full advantage of the trust that we had. and ultimately we could offer a better expense by not just telling them about services and products that other people sold, but we could sell them directly. >> there are a couple companies that do this. not just exactly that, but you've got bluefly, daily deals, et cetera, et cetera. >> many of them are not focused on our demographic. we're very directly -- we're talking to guys. and bluefly, for example. >> young guys or old guys? >> generally young but i think demographically it's 18 to 34-year-olds. what we found is that the core of our audience particularly at jack threads is more of an 18 to 25-year-old. >> let's talk money because often we talk to people like
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yourself and you've got fantastic creative visions, but we've got to monetize it, right? you had between $50 million and $60 million in revenue last year, but you're not yet profitable? >> we have been profitable all the way up. last year gave us runway to lean into areas of investment. we went from 70 to 200 people last year which took a little capital. >> sure. >> we are going to be significantly profitable this year. >> who are you taking business from? >> i think we're taking business from traditional retailers. i think we're also creating demand. one of the things that we pride ourselves on being able to do is not just fulfill demand that already exists in the market but actually inspire people to want products that they maybe didn't think they wanted in the first place. >> if i was a guy between 18 and 34, your target audience, what is the biggest thrill, the greatest thing, the coolest thing i can find on your thrillist site? >> i think the greatest thing is still girls for our guys. fortunately or unfortunately. for us, i think what we are able to do is introduce new brands or
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products that other people aren't covering. >> you're not saying girls are available on thrillist. >> that's a new product that -- no, they're not available on thrillist. >> let's make that clear. that's how one might interpret it. >> stuff to help you get girls, look cool, you've got oakland private plane trips you're offering up. 499 bucks. >> look good, feel good. it's just having fun. and i think that's sort of the mentality that we have is that you can sleep when you're dead. enjoy life. take advantage of it. and we're going to make things super easy for you and expose you to cool products and services. >> what if the target cutoff is 34? that kind of takes you out of that zone, doesn't it? >> yeah, but i live like i'm 18. >> there you go. thank you so much. "street talk" is next. plus, we'll tell you why cheaper and longer is the new mantra at the car dealership. big solar news from china, but everybody has it wrong. we'll tell you why coming up. [ female announcer ] it's time for the annual shareholders meeting.
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okay. the okay. so the dow is down by 71 points. but just keep in mind it is not nearly as bad as the 128 that it was down earlier on today, on a
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confluence of factors. nasdaq and s&p also down. first four stories i want to get to, yahoo! which is higher. >> higher after a longtime bear changing their tune on the stock. oppenheimer upgraded to an outperform. that firm to upgrade yahoo!. that is up about 15% in the past three months. remember, this was an $11 stock back in august of 2011. >> we've also got guess. this stock is sinking, though, guessing here what's going on. >> earnings fell 24%. you had higher input costs, some special one-time charges. those offset better revenue. guidance, though, also below wall street expectations. and the opposite of yahoo! this is 25.17, this was a $40 stock two years ago. >> down 22%.
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scholastic also failing grade. >> lower than expected sales of "the hunger games" trilogy. maybe not as hot as it was. also weaker book club sales and they cut their full year target for the second time -- nobody's reading! >> it's good stuff. >> read america! >> they're great. herman miller. some good news here. >> it's an office furniture company, and this is good news maybe for the job market. fiscal third quarter earnings rose 11%. sales and margins, both higher, guidance right where wall street wants it. why good news for the job market? simple, mandy. if you buy more desks and chairs, it means you've got more butts sitting in those desks and chairs, typing. >> simple math. simple math. you're a thinker, brian sullivan. acadia pharmaceutical is soaring today. >> what a name this has been. in fact, it's now finally big enough we can talk about it. its drug performed positively in late-stage testing for parkinson's disease. an absolutely horrible disease. it blew away the placebo testing. folks, san diego-based acadia
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pharmaceutical, 8.59, it was an $18 stock 18 months ago. look at the one-year chart. parkinson's an awful disease. their trials very positive. >> have you ever met a disease that wasn't horrible or awful? i have not. switching gears now to car sales. loans 72 or longer hitting record levels. let's get to phil lebeau as the to what is behind this, phil. >> it's all about the monthly payment, mandy. and when you take a look at the statistics coming out from jd power, their analysis of retail sales in march show that nearly one out of every three car buyers were taking out loans, at least six years in length. that's the highest they have ever recorded, up basically 2% from where it was in march of last year. and, again, this is all about that lower monthly payment. so what if you're stretching it out over six or seven years, is what car buyers are thinking. the average monthly loan payment in the fourth quarter, that's the most recent data according to experian, $468.
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they're keeping it under that $500 threshold. new vehicle prices are steadily rising. that's because there's more demand, more content in the vehicles, and that's forcing people to say, well, listen, if i'm going to buy a car, i'm likely going to spend over $30,000. in fact, the average transaction price according to true car in february was almost $31,000. as you take a look at shares of gm and ford and really when you compare it with the dow, they've been there for the most part. not doing quite as well as the dow when you take a look at the ford. but generally speaking, the bottom line is this. cars are going to continue going up in price. no one's expecting that to stop. so you have to see how you can fit it into your monthly budget. >> phil, i'm in the market for a car. have never bought a new car. i've been sniffing around, looking at domestically made suvs. i can't believe it. i get an suv because i need to tow a trailer, i'm at $50,000 before i know it. i'm sorry, i can't paid 50 grand
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for a car. i just can't do it. >> and i think people will be surprised that we'll continue to see the prices rise. that demand is really what's going to be driving it in the future. >> do they make more money or are the margins the same and the input costs are higher? >> the margins increase when you factor in things like in infotainment options. people say, if i'm going to spend that money, what kind get the upgrade to all the features i want. well, solar power was forced into bankruptcy after defaulting on a multi-million bonds agreement. it sounded like a good thing for u.s. solar companies, wrong. when we saw this headline, we're like, that's great. it's going to cut out the overcapacity in the sector and may be good for u.s. solar makers. why is that not the case? >> i think effectively what's happening, sun tech is being privatized and taken over by the chinese government. and what that means is instead of sun tech going bankrupt, the chinese government is coming in
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and taking over the operating company and allowing these, the production capacity to stay producing, instead of going out of, you know, going out of production. so that's effectively keeping capacity online. it should be coming out of the market. i think the investors have this wrong. >> you know, because when you first saw -- i admit, when i first saw the headline, i thought, this is good news, because you're going to take it offline, more competitor. do the u.s. solar companies believe it's good for them? >> i think that the u.s. solar companies understand that the chinese government is coming in here and effectively protecting sun tech, providing a cushion for other chinese stocks. the other thing that's important is, sun tech has $579 million in payables that we don't think they're going to pay. some of the u.s. companies like myerberger has exposure to these payable. >> am i right thinking that you put out on march 6th the price target on zero dollars. you can't get any worse than
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that. what happens now that the chinese government is stepping in? does it delist and move on as a viable entity? >> correct. sun tech delists. but you have capacity or supply of 63 gigawatts and demand of 25 gigawatts. you need capacity to completely come offline. with the government supporting sun tech, that's not going to happen. so it will delist, but they'll continue producing panels, and i think the market's assuming they're not and that's really the disconnect of where we stand versus the market. >> you've made some of the great calls on solars. if people have listened to you, they made a lot of money on the downside. have you changed your views, more optimistic at all? is there anyone you like? >> unfortunately, not. we're still quite negative. you have a massive oversupply. we were excited, but with the chinese government coming in and supporting that asset, you're not getting the rationalization of capacity that you need. >> so you're still negative. acxiom's gordon johnson, thank you very much for joining us. let us know if you do turn positive at any point. we'll get you back on and talk about it.
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